Consumers who’ve been through foreclosure may think their days of owning a home are over. Not true. Share the “5 Steps to Owning a Home Again After Foreclosure” from the November “Foreclosure Resource Guide” now available at the REALTOR® Content Resource. Here’s just some of the information:
1. Rebuild your nest egg. Establish a safety net. Since you’re coming out of foreclosure, having six months of living expenses in a liquid account is a minimum to show stability and that you’re able to pay your bills if you lose your job.
2. Raise your credit score. After foreclosure, your credit score, according to myFICO, probably dropped by about 150 points. Raise it with perseverance. Pay bills on time, and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report up to seven years, but it will become less of a red mark as years go by.
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HouseLogic is the NATIONAL ASSOCIATION OF REALTORS’® comprehensive consumer Web site geared to helping home owners make smart decisions to enhance, maintain, and protect the value of their home.
By Nobu Hata
The skinny: The Department of Housing and Urban Development is seeking public commentary through Aug. 14 on three “measures” that “reduce financial risk and preserve affordable mortgage financing for responsible consumers.”
1. Update the combination of credit and down payment requirements for new borrowers. New borrowers seeking FHA-insured financing will be required to have a minimum FICO score of 580 to qualify for FHA’s flagship 3.5 percent down payment program. New borrowers with credit scores of less than a 580 will be required to make a cash investment of at least 10 percent. Borrowers with credit scores of less than 500 will no longer qualify for an FHA-insured mortgage.
2. Reduce allowable seller concessions from 6 percent to 3 percent. Allowing sellers to contribute up to 6 percent of the home’s sales price to offset a buyer’s costs exposes the FHA to excess risk by potentially driving up the cost of the home beyond its appraised value. Reducing seller concessions to 3 percent will bring FHA into conformity with industry standards. Continue reading »
By Nobu Hata
With the down market and the inevitable mass exodus of “those” loan officers, you’d think we could rest easy knowing that the loan officers left would be – for lack of a better word – decent.
Holy Hannah, would we be wrong.
In the last couple weeks, I’ve had various buyers shop their loan around, including those using FHA. What I thought were set guidelines and fees isn’t what it seems. One particular buyer of mine asked for Good Faith Estimates based on the same home, price and mock closing date, from each of the loan officers he’d met with who’d pulled his credit, on my recommendation. Lo and behold, one origination fee was $1,100 more than the other. The rest of the meeting was an eye-opening study of mortgage v. mortgage.
Now, I’m not going to get into specifics of big bank versus broker, nor the merits and drawbacks of each. But what I will say is that there’s no better time to brush up on the new GFEs and fees associated with them. Fees and guidelines for all types of loan products are changing at a lightning pace, and while it’s largely up to our clients to perform their due diligence, it’s up to us to impart some insight. Continue reading »
By G. M. Filisko, contributing writer, HouseLogic
In today’s economy, there’s no shortage of potential buyers, but few have emerged from the recession without a few dings on their credit. Help potential buyers boost their credit with tips from the June “Get Ready to Own” bundle now available at the REALTOR® Content Resource:
1. Know your credit score. Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. Buyers will need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms. They’re entitled to a free copy of their credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. They can access all three versions of their credit report at www.annualcreditreport.com and then review them to ensure the information is accurate.
2. Correct credit report errors. If buyers find mistakes on their credit report, they can write a letter to the credit-reporting agency explaining why they believe there’s an error. They should include documents that support their case and ask that the error be corrected or removed. They can also write to the company, or debt collector, that reported the incorrect information to dispute the information and ask to be copied on any materials sent to credit-reporting agencies.
Those are just two of seven tips buyers can use to boost their credit now available at the REALTOR® Content Resource. If buyers’ credit is impeccable, share tips on steps to take before buying a home, finding the right home, determining how much mortgage you can afford, understanding real estate representation, and keeping your home purchase on track, all of which are also part of the “Get Ready to Own” bundle.
The REALTOR® Content Resource, the new tool brought to you by the NATIONAL ASSOCIATION OF REALTORS®, is an exclusive NAR member benefit that entitles you to download free homeownership content in your consumer Web site, blog, or e-newsletter. HouseLogic is the NATIONAL ASSOCIATION OF REALTORS’® no-topic-left-uncovered consumer website geared to helping home owners make smart decisions to maintain, protect, and increase the value of their home.